How to Distinguish Assets Belonging to a Deceased Person’s Estate from Those Held by a Corporation in Maine

Detailed Answer

When someone dies, their personal assets become part of their estate and pass through probate under Maine law. By contrast, a corporation formed by a relative operates as a separate legal entity. Recognizing which assets belong to the decedent’s estate versus which are owned by a corporation can prevent disputes and protect both estate and corporate interests.

1. Review Ownership Documentation

Check deeds, titles, stock certificates, and account statements. If the decedent held property in their individual name or as joint tenant with right of survivorship, it typically belongs to the estate or passes automatically to the surviving joint owner. If the property is titled in the corporate name, it likely belongs to the corporation.

2. Examine Corporate Records

Under the Maine Business Corporation Act, a corporation is defined as a separate legal person that holds its own assets (Maine Rev. Stat. tit. 13-C, §801). Review the articles of incorporation, bylaws, minutes of directors’ meetings, share ledgers, and banking resolutions. Assets acquired in the corporation’s name or purchased with corporate funds form part of its business property.

3. Inventory Estate Assets

The personal representative must list all assets owned by the decedent at death (Maine Rev. Stat. tit. 18-A, §2-401). This includes real estate, bank accounts, investment accounts, life insurance proceeds payable to the estate, and personal property. Amounts payable directly to the estate or transferred by will or intestacy procedure are estate assets.

4. Separate Funds and Accounts

Ensure corporate and personal bank accounts never commingle. If the decedent used corporate funds for personal purchases or vice versa, tracing transactions can clarify ownership. Commingling may lead to claims by creditors or beneficiaries against both the estate and the corporation.

5. Consult Maine Probate Definitions

The term “estate” includes all property in which the decedent had an interest at death (Maine Rev. Stat. tit. 18-A, §1-201). Anything not held by the decedent individually but instead owned by a corporation is excluded from the estate inventory.

Helpful Hints

• Check beneficiary designations on retirement and insurance policies to see if they pass outside probate.
• Obtain certified copies of the decedent’s death certificate before transferring estate assets.
• Review corporate bank statements and ledgers for any personal withdrawals or loans.
• Look for shareholder agreements that address distributions of corporate assets on a shareholder’s death.
• If you find mixed-use assets, consult an attorney or accountant to perform a forensic tracing of funds.
• Keep clear records of all meetings and decisions made by the corporation’s board to support its separate existence.